Porter's Five Forces Analises Essay Example | Topics and Well Written Essays - 1000 words

Porters Five Forces Analises - Essay ExampleThis essay will consume porters five force homunculus to conduct an analysis of the competitive environment of UK coffee industry. Discussion Porters five forces model is an analytical tool that helps organizations to determine the competitive force of suppliers bargaining power, buyers bargaining power, industry rivalry, threat of substitutes and threat of modernistic entrants within an industry. Industry Rivalry UK coffee commercialize is highly competitive as several leading global coffee chains and potential local anaesthetic chains are competing with each other within this similar industry. Starbucks is the leading organization within the UK coffee industry. High concentration among the rivals, high fixed costs, inactive market growth and presence of several perishable products, such as coffee drinks and regimen items are the major characteristics of UK coffee industry (Kine, 2010, p.245). Organizations like Starbucks and costa are competing with each other for the same customers. These organizations have similar corporate goals, such as customer friendly products and employee friendly business policies and strategies. Zero break cost for the potential customers promotes price war among the organizations (West, 2012, p.165). On the other hand, static market growth forces the existing organization to fight with each other for the market share. This intense market competition forces the organizations to adopt aggressive marketing strategy to survive in the market (Hill and Jones, 2008, p.12). Looking into these above aspects, it hatful be verbalise that the rivalry among existing organization within UK coffee market is quite high. Threat of New Entrants It is true that organizations within this industry require large capital to developed coffee chain stores. Therefore, it is difficult for the newcomers to compete with the potential and existing organizations with high capital and more than sufficient fi nance (Kim and Mauborgne, 2005, p.66). On the other hand, meaningful and favourite locations are already occupied by the leading organizations. Therefore, it is tough for the new entrants to enjoy maximized footfall. Significant tick differentiation and differentiated product bourn increases the brand preference of leading players. It is difficult for the new organizations to compete with these leading players at the initial stage. Last but not the least high lawful entry barriers and market saturation can make it difficult for the new entrants to maximize market share at initial starting phase. Looking into these factors, it can be stated that the threat of new entrants is low. Threat of Substitutes Coffee is considered as a major energy drink products. The popularity and acceptance of this product is unavoidable. Recently, several food retail chains and soft drink manufacturing and distributing organizations are introducing several substitute calories free and differentiated e nergy drink products (Hutchens, 2009, p.31). Globalization and advanced technology is incite organizations to offer substitute products. Somehow, these differentiated substitute products is affecting the total market share growth of the coffee industry. In addition to this, low or measly switching cost to other substitute products in encouraging the potential customers to taste the differences. Though, several coffee chains are trying to differentiate their brand and product level, but